The latest lamb export statistics published by Meat Livestock Australia (MLA) are the highest export figures on record for a single month. Some 36,703t of lamb was exported during May 2024, up 5,385t on April 2024 levels and 40% to 45% on 12 months previous.

MLA reports that the US continues to be the largest market for Australian lamb followed by China, the Middle East and North African (MENA) region. The growth in exports to the US market is a sore point for Irish plants who are still trying to progress final market access but are faced with ongoing challenges in agreeing on veterinary certificates.

Despite Australian ewe numbers reducing marginally in 2023, lamb production is on target to reach a new record level of over 620,000t, an increase of over 21,000t compared to 2023 volumes.

The increase in production is stemming from lamb throughput in slaughter plants predicted to increase by 5%, or approximately 1.2m head, and surpass 26m head. To put the scale of the increase into perspective Ireland exported only 77,000t of sheepmeat in 2023, highlighting the difference in production levels.

Mutton exports

Australian mutton exports were also significantly higher in May, rising 11% year-on-year and recorded at 21,664t. This is the largest monthly figure since November 2019. Mutton throughput has been amplified in recent months by reduced confidence on the back of low farmgate returns and culling due to tighter drought-related feed supplies in some parts of the country.

China remained the largest market for May despite export volumes falling 38% year-on-year to 5,363t. The majority of growth occurred in MENA regions including a doubling of exports to Saudi Arabia at 1,950t, a 146% increase in exports to Oman at 1,284t and an eightfold lift in exports to Qatar to 1,229t.

MLA reports exports to our other key markets (outside of China and MENA) remained robust; exports to Malaysia rose 26% year-on-year to 2,365 tonnes, exports to the US also rose by 26% to 936 tonnes and exports to Singapore lifted 11% to 889 tonnes.

Growth in exports to the Chinese market has been underpinned by the China-Australia Free Trade Agreement. This agreement came in to force in 2015 but a major milestone for sheepmeat occurred on 1 January 2023 with the elimination of tariffs which previously ranged from 12% to 23%.

Sheepmeat exports to China were still substantial despite this tariff but jumped sharply in 2023. MLA reports that China, the largest global importer of sheepmeat, recorded a 24% increase in total sheepmeat imports in 2023, reaching some 429,434t.

This increase in demand was mainly met by Australia (71%) with sheepmeat exports increasing by 43% to 197,448t. This lifted Australia’s share of the Chinese market to 46% with this growth also coming at the expense of New Zealand products. Exports from New Zealand to China rose by 10% but its percentage share of the import market reduced from 57% to 50%.

The elimination of Chinese import quotas, the resurgence of the US sheepmeat import market and ongoing trading challenges in the Suez Canal resulting in traffic falling by over 60% in the first four months of 2024 (UK Office for National Statistics) have curtailed any major jump in sheepmeat exports to the UK.

Tariff-free quotas

The latest data from the Australian Government Department of Agriculture, Fisheries and Forestry as of 31 May 2024 shows Australia filling 7% or 2,242t of its new 30,556t tariff-free quota for 2024. Australia also has access to another 13,335t UK quota under World Trade Organisation (WTO) allowances and it has filled 10,404t, or 78% of this quota. While it has filled 2,329t, or 40% of its EU WTO quota of 5,851t.

Reports indicate that Australian export personnel are working hard to develop inroads into the UK market with the differential in price attractive at present. The country has also being focusing heavily on diversifying in to other markets to find the best balance for all carcase components.

MLA cite that as Australian exports maintain a strong pace, it will present opportunities to develop market share in its traditional key markets and emerging markets. While relatively small, volumes exported to Iraq for example are highlighted as increasing fivefold to 1,386t, making the market the eight largest destination for lamb in May.